The Paris stock exchange jumped more than six percent, with the Frankfurt market advancing more than five percent. The London exchange closed up nearly three percent, and US indexes were all ahead by more than two percent in midday trading.

European leaders said the debt-relief agreement could help resolve the continent's two-year-long crisis and give Greece a chance to regain its economic footing.

Following 10 hours of tense negotiations in Brussels, EU leaders said they had convinced banks and investors to accept a 50 percent loss on Greek government bonds, effectively reducing Greek debt by US$140 billion.

At the same time, the banks are required to raise an additional US$148 billion by June. The 17-nation bloc that uses the euro currency is increasing the firepower of its bailout fund to US$1.4 trillion to cover future assistance for debt-ridden nations.

The deal still leaves Greece with a significant debt burden - estimated at 120 percent of its economic output in 2020, down from 160 percent now.